Ashland corporation estimates its manufacturing overhead costs to be $360,000 and its direct labor costs to be $400,000 for 2020. the actual manufacturing labor costs were $120,000 for job 1, $180,000 for job 2 and $200,000 for job 3 during 2020. manufacturing overhead is applied to jobs on the basis of direct labor costs using a predetermined overhead rate. the actual manufacturing overhead cost for the year was $212,000. the amount of overhead assigned to job 3 during 2020 was:

Allocated MOH= $180,000

Explanation:

Giving the following information:

Manufacturing overhead is applied to jobs based on direct labor costs using a predetermined overhead rate.

The estimated manufacturing overhead costs are $360,000 and direct labor costs $400,000.

First, we need to calculate the MOH rate:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= 360000/400000= $0.9 per direct labor dollar.

The actual manufacturing labor costs for job 3 are $200,000.

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 0.9*200000= $180,000

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